CAD CPI could trigger next wave down
The previous CAD CPI data marked a significant turning point, with CAD having a 2 week hangover and the basket of major currencies getting a wild ride against the weakened CAD.
Could we see the opposite this time around? USD is seeing significant strength against the basket but is starting to look ripe for a pullback. If we see another strong day for USD on monday, pushing USDCAD into the cluster of pre vious activity between 1.36000 - 1.36500, we could be primed for a significant pullback in USD strength and the CAD CPI might just be the catalyst for a major leg down to back below 1.34500.
Of course, don't trade blindly, wait to see if the setup occurs, see the CPI numbers and how the market reacts. This is a very specific scenario, but if we are in that 1.36000 range when the numbers are released Tuesday, I'll be very quick to enter short if the market sees intraday downside momentum.
Could we see the opposite this time around? USD is seeing significant strength against the basket but is starting to look ripe for a pullback. If we see another strong day for USD on monday, pushing USDCAD into the cluster of pre vious activity between 1.36000 - 1.36500, we could be primed for a significant pullback in USD strength and the CAD CPI might just be the catalyst for a major leg down to back below 1.34500.
Of course, don't trade blindly, wait to see if the setup occurs, see the CPI numbers and how the market reacts. This is a very specific scenario, but if we are in that 1.36000 range when the numbers are released Tuesday, I'll be very quick to enter short if the market sees intraday downside momentum.
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